If you are a high school student, you are probably dreaming of college life: Ultimate Frisbee on the quad and late-night study sessions over coffee. When your parents think of college, they are likely seeing dollar signs and wondering how to afford higher education costs. In order to receive any form of financial aid, completing the FAFSA, or the Free Application for Federal Student Aid, is the first step. It can be a complex form, so we’re answering the most common questions.
Most common FAFSA Questions - Answered:
Where do you complete the FAFSA?
You can find the FAFSA application at FAFSA.ed.gov. You will need a Federal Student Aid ID and password. (If you have previously filled out a FAFSA, you already have those in the system; if this is your first time you will need your Social Security Number.) Completing the FAFSA is the first step to take in order to receive financial aid.
What information do I need to complete the FAFSA?
Planning ahead and gathering the necessary paperwork ahead of time will make it easier to complete the FAFSA. Nerdwallet has compiled a checklist of documents you will need, based on your situation.
There are some tricky questions – what does it all mean?
The FAFSA includes several confusing questions. With more than 100 questions on the form, pay special attention to these questions, according to this advice from Time:
- Questions 24 -25: These questions ask about your parent’s education. Be sure to read the question carefully: The question asks about completed education. Even if your parents are just a credit or two shy of earning their degree, use that to your advantage. There is a lot of aid to students with parents who don’t have a college degree.
- Question 31: This question pertains to work study, a program that allows students to work on campus to earn money to pay for education expenses. Even if you don’t think you will want to work during school, check “yes” here, because it keeps you in the running for several on-campus opportunities, and are a great way to earn extra money while in school. (You don’t have to accept work study, even if it is part of your financial aid award.)
- Questions 61-64: These questions ask about your parents – easy enough. Parents who live in the same household need to provide financial information to the FAFSA (whether or not they will be contributing to help pay for education). If parents are divorced or separated, the parent that the student lives with the most (even 51 percent of the time) should be considered the primary parent if they claim the student as a dependent.
- Question 90-91: These questions ask about assets. Be sure you are only reporting the family and savings assets once (preferably as assets of the parents). This is the spot where you would list family assets, which include taxable investment accounts and 529 savings plans, but exclude the value of the home you live in and retirement accounts.
When is the FAFSA application deadline?
That depends on where you live, and which school you would like to share information with. You can find deadlines here based on where you live and when you are requesting the aid (which school year). But don’t wait to complete – often, colleges award financial aid on a first come, first served basis. The earlier you submit your information, the more likely you will receive a solid financial aid package.
Where should I send completed FAFSA information?
Even if you haven’t decided on a college yet, be sure you complete and send your FAFSA information to the top 10 colleges you are considering. If you change your mind on schools after you complete it, simply log into the FAFSA website and click the link to “make corrections.” Here you can replace some of the schools with the new school of your choice.
What happens after I complete the FAFSA?
After completing the FAFSA, you’ll receive a Student Aid Report (SAR), which summarizes the financial data you submitted. Be sure to review the SAR for accuracy, and make any changes necessary. The SAR will be sent to the schools you chose to receive the data, and they will use this information to compile a financial aid package. The school will put together a financial aid package that will have a combination of grants, scholarships, loans and work study jobs that help you meet the tuition requirements.
What is the difference between subsidized and unsubsidized loans?
When you receive your financial aid package from your school, you may see a mixture of subsidized and unsubsidized loans. Subsidized loans are loans that the government pay your interest (or subsidize) the interest on your loan while you are in school. If you borrow $2000 with a subsidized loan your first year, you will only owe $2,000 when you graduate. Typically these loans are awarded to people with a financial need (based on the information in your SAR). On the other hand, an unsubsidized loan is a loan that will accrue interest as soon as the loan is taken out. Using the same example, if you borrow $2,000 your freshman year, you will owe $2,400 when you graduate after four years (with a 4-percent growth rate and fees and interest charges.)
The FAFSA is complex document, but is a vital part of the financial aid process. Both students and parents should take an active part in completing this, and planning for the future. Luckily, your Farm Bureau agent can help with smart budgeting tools and information on tax-advantaged college savings plans.